States ask Centre to submit details on ATF pricing by Jun 21

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New Delhi, Jun 16 (UNI) States today asked the Centre to provide before June 21 the details of how the prices of aviation turbine fuel (ATF) were fixed, before they could decide on reducing sales tax on the jet fuel.

Addressing reporters after the meeting of the State finance ministers on VAT, its chairman Asim Dasgupta said the issue will be taken up at the panel's next meeting in Srinagar between June 21-23.

''We will discuss the issue after getting full details of price fixation of ATF from the Ministry concerned,'' Mr Dasgupta said.

Asked whether ATF could be given a ''declared goods'' status, which will reduce sales tax on it from a maximum of 35 per cent to a VAT of four per cent, Mr Dasgupta said the committee wanted details on price fixation.

Last week, Civil Aviaition Minister Praful Patel had met Prime Minister Manmohan Singh and Finance Minister P Chidambaram, and sought a declared goods status for ATF.

But since sales tax is a State subject, he was asked to make his request to the state governments.

Mr Patel argued that a high ATF would end the cheap-fare era and rapid growth in passenger traffic, and would thus have a cascading effect on other sectors of the economy.

The ATF price has gone up from Rs 21,000 per kilo litre in 2004 to more than Rs 70,000 now, with the airlines expected to incur a loss of more than Rs 8,000 crore in 2008-09.

Last month, the government had raised ATF prices over 18 per cent, forcing some airlines to raise fares by about 10 per cent and slash their operations.


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